The Abra Group (majority investor in Gol Linhas Aéreas and Avianca) and Azul Linhas Aéreas signed today a non-binding Memorandum of Understanding (MoU) with the intention of exploring a combination of their businesses in Brazil, improving connectivity throughout the country through the expansion of domestic, regional and international flights, improving competitiveness, products and services and strengthening the country’s connections with the rest of the world. Gol is not a party to the MoU.
Gol and Azul’s networks and fleets are complementary on nearly 90% of routes, with each company flying different aircraft sizes and serving different destinations. The parties expect that a business combination will result in efficiencies and cost reductions that will directly benefit consumers. Following the completion of this transaction, Gol and Azul are expected to maintain their independent brands and operational certificates, serving more than 200 destinations in Brazil and internationally, with plans to expand their air networks and connectivity and create additional jobs.
“We are pleased to announce our intention to explore a combination of the Gol and Azul businesses to create a more competitive and resilient global aviation player and further democratize the sector. As part of Abra’s strategy to strengthen the Brazilian market, this is an important opportunity to further intensify our presence in Brazil and strengthen our global network. In parallel, as Abra Group, we continue to all the work that Gol’s management and the entire Gol team have done towards the successful restructuring of Gol during its Chapter 11 process and are excited about its prospects of emerging as a well-capitalized standalone entity,” said Manuel Irarrázaval, Chief Financial Officer (CFO) of Abra.
The parties have agreed on a commercial principle, to ensure adequate capitalization, that any combination will result in a net leverage of the combined entity that will be comparable to or better than Gol's net leverage at the time of the Transaction, following the consummation of its plan of reorganization.
The closing of the transaction is subject to the agreement between the Abra Group and Azul on the economic of the transaction, the satisfactory completion of due diligence, the execution of definitive agreements, the obtaining of corporate and regulatory approvals (including from Brazilian antitrust authorities), the satisfaction of customary closing conditions, the consummation of Gol's Chapter 11 reorganization plan and the receipt by Abra of the consideration provided for therein.
The Memorandum of Understanding announced today is the initial stage of a negotiation process to explore the feasibility of a potential transaction. Accordingly, the strategy, business conduct and operations of the Abra Group and Gol will not change as a result of the g of the MOU.
Wachtell, Lipton, Rosen & Katz and Pinheiro Guimarães are acting as legal advisors to Abra in connection with the potential Transaction. Caminati Bueno Advogados is acting as lead antitrust counsel.
Follow our channels:
For all the latest news, follow our Google News channel
